Universal-EMI Tie Up Will Create Mega-Label That Could Reassert Industry Control Over Music

It's never been cheaper or easier to find, obtain, and listen to new music than it is today. Amazon and Apple sell digital music for lower nominal prices than I paid 15 years ago. Pandora, Spotify, and Rdio stream it. And even though incomes have fallen in key segments of the music industry, artists have continued to produce and distribute songs and albums for us to enjoy.

But in an excellent long-form Huffington Post piece, Zack Carter and Jason Cherkis note that a proposed merger between Universal and EMI would create a juggernaut controlling 40 percent of the music industry and potentially unravel a lot of this progress. It's not really a polemical piece, but the obvious implication is that antitrust regulators should frown on the deal.

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That makes sense to me. But the issues Carter and Cherkis raise cut to the heart of one of the biggest contradiction in American economic policy. On the one hand we have a set of laws and institutions—antitrust—dedicated to preventing producers from extracting monopoly profits from consumers. On the other hand we have a different set of laws and institutions—copyright and patents—whose entire purpose is to allow producers to extract monopoly profits from consumers. The whole alleged problem of digital piracy is that we want to push profits and prices higher, either to incentivize creation or else to somehow give people their due cosmic reward. Outside the specific case of copyright, few people seem to accept this logic and the idea that public policy should discourage monopolists and monopoly profits is widely accepted. But as the media and software industries grow in importance and the scope of patent law expands, we have this growing monopoly-promotion element to our political economy that makes the idea of blocking a Universal-EMI merger seem dissonant.